Exhibit 99.1
Contact: Richard L. Van Kirk, Chief Executive Officer
(949) 769-3200
For Immediate Release
PRO-DEX, INC. ANNOUNCES FISCAL 2024 FIRST QUARTER RESULTS
IRVINE, CA, November 2, 2023 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2024 first quarter ended September 30, 2023. The Company also filed its Quarterly Report on Form 10-Q for the first quarter of fiscal year 2024 with the Securities and Exchange Commission today.
Net sales for the three months ended September 30, 2023, increased $851,000, or 8%, to $11.9 million from $11.1 million for the three months ended September 30, 2022. The increase is driven primarily by $1.8 million in increased repairs of the surgical handpiece we sell to our largest customer offset primarily by a decrease of $0.7 million in sales of our NRE & proto-type offerings.
Gross profit for the three months ended September 30, 2023, increased $702,000, or 24%, compared to the year-ago period. Gross margin increased by 4 percentage points to 31% during the three months ended September 30, 2023, compared to 27% during the corresponding year-ago period, due primarily to the prior year cost of sales including approximately $450,000 in repair costs to upgrade the handpiece we sell our largest customer at no additional costs. We had no similar expenses in the current fiscal year.
Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended September 30, 2023, decreased $181,000 from the corresponding year-ago period. The decrease resulted from decreased research and development expenses as we have fewer expenses related to internal development projects in the first quarter of fiscal 2024 compared to the corresponding period of the prior fiscal year.
Net loss for the quarter ended September 30, 2023, was $615,000, or $0.17 per diluted share, compared to net income of $1.2 million, or $0.33 per diluted share, for the quarter ended September 30, 2022. Our net loss includes non-operating expense of $2.7 million for the quarter ended September 30, 2023, consisting primarily of unrealized losses on investments of $2.6 million. Most of the unrealized loss on investments relates to our Warrant to purchase common stock of Monogram Orthopaedics Inc. (NasdaqCM: MGRM), which had a $2.5 million reduction in estimated fair value for the first quarter ended September 30, 2023, but still has an estimated fair value of $3.7 million as of September 30, 2023. Our investments are recorded at estimated fair value, and the valuation can be highly volatile.
CEO Comments
Richard L. (“Rick”) Van Kirk, the Company’s President and Chief Executive Officer, commented, “We are pleased with our first quarter results and excited to share that sales for the first quarter ended September 30, 2023, includes approximately $1.1 million related to the launch of a new product in our Thoracic driver product line.” Mr. Van Kirk concluded, “We are confident that with our assembly and repairs operations fully transitioned to the Franklin facility we are poised for continued long-term growth.”
About Pro-Dex, Inc.:
Pro-Dex, Inc. specializes in the design, development, and manufacture of autoclavable, battery-powered and electric, multi-function surgical drivers and shavers used primarily in the orthopedic, thoracic, and maxocranial facial markets. We have patented adoptive torque-limiting software and proprietary sealing solutions that appeal to our customers, primarily medical device distributors. Pro-Dex also sells compact pneumatic air motors for a variety of industrial applications. Pro-Dex's products are found in hospitals and medical engineering labs around the world. For more information, visit the Company's website at www.pro-dex.com.
Statements herein concerning the Company's plans, growth, and strategies may include 'forward-looking statements' within the context of the federal securities laws. Statements regarding the Company's future events, developments, and future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. The Company's actual results may differ materially from those suggested as a result of various factors. Interested parties should refer to the risk factors and other disclosures concerning the operational and business concerns of the Company set forth in the Company's filings with the Securities and Exchange Commission.
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PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)
| September 30, 2023 | June 30, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 1,904 | $ | 2,936 | ||||
| Investments | 1,010 | 1,134 | ||||||
| Accounts receivable, net of allowance for credit losses of $0 at September 30, 2023 and at June 30, 2023, respectively | 11,034 | 9,952 | ||||||
| Deferred costs | 591 | 494 | ||||||
| Income taxes receivable | 420 | — | ||||||
| Inventory | 16,264 | 16,167 | ||||||
| Prepaid expenses and other current assets | 201 | 296 | ||||||
| Total current assets | 31,424 | 30,979 | ||||||
| Land and building, net | 6,226 | 6,249 | ||||||
| Equipment and leasehold improvements, net | 4,952 | 5,079 | ||||||
| Right-of-use asset, net | 1,774 | 1,872 | ||||||
| Intangibles, net | 75 | 81 | ||||||
| Investments | 5,092 | 7,521 | ||||||
| Other assets | 42 | 42 | ||||||
| Total assets | $ | 49,585 | $ | 51,823 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,740 | $ | 2,261 | ||||
| Accrued liabilities | 2,701 | 3,135 | ||||||
| Income taxes payable | — | 453 | ||||||
| Notes payable | 2,840 | 3,827 | ||||||
| Total current liabilities | 8,281 | 9,676 | ||||||
| Lease liability, net of current portion | 1,529 | 1,638 | ||||||
| Deferred income taxes, net | 8 | 8 | ||||||
| Notes payable, net of current portion | 8,572 | 8,911 | ||||||
| Total non-current liabilities | 10,109 | 10,557 | ||||||
| Total liabilities | 18,390 | 20,233 | ||||||
Shareholders’ Equity: | ||||||||
| Common stock; no par value; 50,000,000 shares authorized; 3,547,330 and 3,545,309 shares issued and outstanding at September 30, 2023 and June 30, 2023, respectively | 6,987 | 6,767 | ||||||
| Retained earnings | 24,208 | 24,823 | ||||||
| Total shareholders’ equity | 31,195 | 31,590 | ||||||
| Total liabilities and shareholders’ equity | $ | 49,585 | $ | 51,823 | ||||
PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share amounts)
| Three Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| (as restated) | ||||||||
| Net sales | $ | 11,938 | $ | 11,087 | ||||
| Cost of sales | 8,280 | 8,131 | ||||||
| Gross profit | 3,658 | 2,956 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 25 | 53 | ||||||
| General and administrative expenses | 995 | 1,024 | ||||||
| Research and development costs | 805 | 929 | ||||||
| Total operating expenses | 1,825 | 2,006 | ||||||
| Operating income | 1,833 | 950 | ||||||
| Other income (expense): | ||||||||
| Interest and dividend income | 24 | 218 | ||||||
| Realized gain on sale of marketable equity investments | — | 6 | ||||||
| Unrealized gain on marketable equity investments | (2,553 | ) | 425 | |||||
| Interest expense | (133 | ) | (130 | ) | ||||
| Total other income | (2,662 | ) | 519 | |||||
| Income before income taxes | (829 | ) | 1,469 | |||||
| Provision for income taxes | (214 | ) | 266 | |||||
| Net income | $ | (615 | ) | $ | 1,203 | |||
| Basic and diluted net income per share: | ||||||||
| Basic net income per share | $ | (0.17 | ) | $ | 0.33 | |||
| Diluted net income per share | $ | (0.17 | ) | $ | 0.33 | |||
| Weighted average common shares outstanding: | ||||||||
| Basic | 3,546,737 | 3,616,392 | ||||||
| Diluted | 3,546,737 | 3,694,959 | ||||||
| Common shares outstanding | 3,547,330 | 3,606,422 | ||||||